King Salman is sending a message to the U.S. and to restive young Saudis flirting with joining Islamic State.

By Karen Elliott House

May 1, 2015 7:08 p.m. ET

A handout picture taken and released by the SPA shows Saudis greeting the new Crown Prince Muhammad bin Nayef, center right, and the new Deputy Crown Prince, Minister of Defence Muhammad bin Salman, center left, on Wednesday. Photo: Saudi Press Agency/AFP/Getty Images/HOFour months into his rule, Saudi King Salman reshuffled the face cards in the Saudi royal deck this week. His most apparent goal is to placate multiple domestic constituencies, from frustrated youths to religious fundamentalists. But the larger and more important messages are regional and international. The king elevated two hard-line royal relatives. His 55-year-old nephew, Muhammad bin Nayef, was made crown prince, and his 30-year-old son, Muhammad bin Salman, was named deputy crown prince. The appointments serve notice that Saudi Arabia will continue to pursue an assertive foreign policy in the Middle East aimed at blocking Iranian hegemony. The king is also telling an Obama administration no longer trusted by the Saudis—given the president’s lust for a nuclear deal with Iran—that Saudi Arabia increasingly will make its own way in the world. In short, the Saudis, like the Israelis, have given up on this American administration—though not yet on America.Indeed, by naming Saudi ambassador Adel al Jubeir as the kingdom’s new foreign minister, King Salman is fielding a strong team of experts on America in Mr. al Jubeir and Crown Prince Muhammad bin Jayef. They can be expected to go all-out in lobbying Congress, the Pentagon and other U.S. power centers to show stronger support for Saudi Arabia even as President Obama courts Iran. The crown prince, who is also Interior minister, has been working with the U.S. since 2001 on antiterrorism issues. He and Mr. al Jubeir, ambassador to the U.S. since 2007, are well respected in Washington. Elevating this duo to manage Saudi foreign policy with the U.S. is not unlike Israeli Prime Minister Benjamin Netanyahu’s run around the president to speak to Congress.The king’s removal of his half-brother Muqrin bin Abdulaziz as crown prince and next in line of succession isn’t surprising, but the timing is. Prince Muqrin, 69, the youngest of the sons of King Abdul Aziz who have ruled Saudi Arabia since their father’s death in 1953, had long been said to be an unlikely king because his mother was a Yemeni concubine. But his abrupt removal—with the king’s nephew installed as the new heir to the throne, and his relatively young son as second in line—was a shock to many Saudis accustomed to the House of Saud’s respect for age. Such overt nepotism was also surprising—no other Saudi king since the death of Abdul Aziz has put his own son in direct line for the throne.The new deputy crown prince is the eldest son of King Salman’s third and favorite wife, who seems to have succeeded at positioning her son ahead of the king’s numerous older, more experienced sons. In 2009, Prince Muhammad began service as chief aide to his father, then the governor of Riyadh. During an interview I had with his father at that time, Prince Muhammad—then in his mid-20s—displayed an easy manner and even broke in with a joke at one point, displaying a rare informality between Saudi royals and their sons—at least in public.While new Crown Prince Muhammad bin Nayef is widely respected as a seasoned and hardworking royal, the new deputy crown prince is more controversial. Some Saudis see him as too young and inexperienced. As defense minister, he is leading the current Saudi bombing campaign in Yemen—an immediate test of his leadership. If the effort succeeds, which is far from certain, it will help establish his reputation.The first test of this new Saudi leadership team will come in two weeks, when Mr. Obama hosts a summit of the Gulf Cooperation Council, or GCC, a collection of small Gulf countries plus Saudi Arabia, that Riyadh is seeking to lead in combating Iran’s Middle East expansion. The Saudis still hope to persuade Washington to be more active in the fight not just against Islamic State forces but also against Bashar Assad in Syria. Mr. Obama seems to see the summit as simply an opportunity to encourage these nations to fend for themselves, showing U.S. concern for their security without offering concrete action. As Saudis point out, there is a chasm between Mr. Obama’s words and actions—as seen in his unilateral erasing of the “red line” he declared regarding Mr. Assad’s use of chemical weapons in Syria. Domestically, King Salman’s move last week seemed an acknowledgment that something must be done to appease frustrated young Saudis, all too many of whom are jobless or underemployed. Some 60% of Saudis are under age 20, and the Saudi Interior ministry estimates that more than 2,000 have joined Islamic State. By pushing the young royal leadership to the fore, King Salman is signaling that their generation is gaining power—an important message when Islamic State is targeting young religious Saudis by arguing that the royal family is corrupt and more concerned with earthly perks than with attaining paradise. Whether deliberate or not, the appointment of a nonroyal to the high rank of foreign minister will encourage restive Saudis studying at home and the 200,000 abroad that they have a future if they work hard and be patient.Finally, in sacking Noura al Faiz as deputy education minister last week, King Salman ousted Saudi Arabia’s highest-ranking female to please religious conservatives. King Abdullah, who died in January, had sought to give women a greater role in the kingdom and to reduce the role of the religious police in Saudis’ lives. King Salman, confronted abroad with rising Iranian mischief and declining U.S. support, is putting his faith in his young, assertive team to lead foreign policy, and in placating the religious establishment at home to secure its continuing support for Al Saud rule.

Ms. House a former publisher of The Wall Street Journal who won a Pulitzer Prize as a reporter for her coverage of the Middle East, is the author of “On Saudi Arabia: Its People, Past, Religion, Fault Lines—and Future” (Knopf, 2012).

AT THE beginning of April international investors made two whopping bets by snapping up the first ever 100-year bond denominated in euros. The first bet was that the euro would still exist a century from now. No bookie would give short odds on that. The second was that the issuer, Mexico, which suffered three long cycles of boom and bust in the past century, would continue to be creditworthy for the next 100 years.Mexicans, whose country has, as one economic historian puts it, lived longer in moratoria than with access to capital markets, reacted with bemusement. A typically gloomy columnist predicted that, since Mexico will have run out of oil by 2115, it will have to sell off the country’s extremities to repay the bondholders.

Foreign creditors are more bullish. Over the past five years they have extended the equivalent of more than $5 billion of 100-year bonds to Mexico in three currencies: dollars, sterling and now euros. It is the only country to have tapped the so-called centennial market since China and the Philippines in the 1990s, and it has done so at relatively low yields—of 6.1% on its dollar bond in 2010 and just 4.2% on its euro bond last month. Those are extraordinarily good terms given Mexico’s distinctly spotty credit record (see chart), which raises two questions. How has Mexico managed to pull off this “sale of the century”? And what are the chances of investors, or their grandchildren, getting their money back?

The answer to the first question is a combination of salesmanship and timing. The finance ministry’s bright, American-educated technocrats know how to attract attention from investors who may not have considered Mexico before. The euro-denominated bond, for instance, was sold largely to insurance companies and annuity firms. One advantage of its long life, for borrower and creditors alike, is that it helps avoid the sort of overcrowded redemption schedules that contributed to Mexico’s debt crises in 1982-83 and 1994-95.But in an era when the yields on the bonds of many rich countries are negative, Mexico’s main selling-point is a relatively high return for a borrower that last year received an “A” rating from Moody’s. On the day Mexico issued its euro-denominated centennial bond, Switzerland sold a ten-year bond at a negative yield—a first.Mexico also stands out from other emerging markets in several ways. Although the halving of the oil price has hurt the public finances, the peso has done better than many of its peers. Agustín Carstens, the governor of the central bank, says Mexico has an “arsenal” of $195 billion of international reserves and a $70 billion credit line from the IMF in case of financial-market volatility. That has helped to attract outsiders: foreigners hold 2.2 trillion pesos ($144 billion) of domestic debt.The government has further impressed investors by tightening its belt before times get tougher. It has cut spending in an election year and is attempting to implement a string of reforms aimed at bolstering competition in areas like energy and telecommunications that have the potential to attract large sums of foreign direct investment. “Mexico is a bright spot among emerging markets. It is one of the few countries that has been fixing the roof while the sun shines,” says Andrew Stanners of Aberdeen Asset Management, a big investment fund.So why are few Mexicans so sanguine? Gerardo Esquivel of El Colegio de México, a university, describes the government’s approach with a different home-improvement analogy. He likens it to “putting a bright coat of paint on the exterior of the house, while the inside is rotting away”. The problem, he says, is that the 20 years of macroeconomic stability and flexible exchange rates that have endeared Mexico to foreign creditors have been accompanied by meagre, narrowly based growth that depends heavily on exports.Growth in output per person has averaged about 1% a year since 1995. Poverty levels have remained stagnant. President Enrique Peña Nieto initially promised his reforms would bring annual growth of 5-6%; his government has since had to lower its forecasts repeatedly. Private-sector economists think growth will average 3.8% over the next decade, according to a poll from the central bank.The strength of Mexico’s exports to America—especially cars—has not translated into booming domestic demand due to decades of miserly wages, economists say. A huge, unproductive informal sector and general lawlessness also drag the economy down. The “pressure cooker effect” of low growth, low wages and rising inequality of income and opportunity could explode, according to Mr Esquivel. “The Peña Nieto administration doesn’t understand this. They still talk in terms of trickle-down.”The government disputes this. Alejandro Díaz de Léon, the finance ministry’s point man on the latest 100-year bond, acknowledges that Mexico has underperformed in terms of growth. “Productivity, job creation and wealth creation are the key issues for the future,” he admits. But he says the president’s reforms aim to address them. Moreover, he argues, the lessons learned from Mexico’s past booms and busts are so embedded among politicians and officials that there is little chance of a slide back into financial chaos. He points to Mexico’s independent central bank, open financial markets and free-trade agreements as guarantors of stability.Demography is another card played by the optimists. A whopping 46% of the population is under 25. Luis de la Calle, an uncharacteristically upbeat Mexican economist, says this alone could turn Mexico into one of the world’s biggest economies within the next few decades. He believes that the country will soon rue its 100-year issuance at 4%, because it will be able to borrow far more cheaply. “We’ll prepay that bond, no doubt,” he says.Whether countries repay their debts comes down to questions of political will as much as economic performance, however. Some fret that Mexico’s past will return to haunt it. The country inherited a habit of default from the Spanish empire, which reneged on its debts more than a dozen times between the 16th and 20th centuries. Mexicans have also alternated repeatedly between an embrace of globalisation and a reversion to an inward-looking nationalism.For the first decade of the 20th century, for instance, international bankers threw money at Mexico because of its macroeconomic stability, its railway boom and a global liquidity glut. Then came the murderous revolution of 1910, which erupted partly because the fruits of that prosperity had not been shared. Mexico defaulted on its debt in 1914. It was shut out of capital markets for most of the next three decades. It did not become a big borrower again until the 1970s. For bondholders to get their money back in 2115, Mexico must defy its history and remain open to trade and foreign capital.

In October 2005, earmarks were a Washington fact of life. Then former Oklahoma Sen. Tom Coburn took to the floor to decry pork spending for Alaska’s “Bridge to Nowhere.” The phrase became a national rallying cry against government waste. It required another five years, but in late 2010, Republicans forswore earmarks.Conservative reformers are rolling out that strategy again, this time to deep-six one of Washington’s oldest dispensers of corporate welfare: the Export-Import Bank. The campaign is already in full swing, with a coalition of free-market Republicans and grass-roots groups dropping a daily barrage about the bank’s corruption, mismanagement and cronyism. Their hope is that by June 30 they will have redefined Ex-Im as the Bank to Nowhere. That date marks the expiration of Ex-Im’s charter, and it’s why this campaign (in comparison with earmarks) is turbocharged. About half the Republican caucus remains committed to the Ex-Im favor factory and wants Speaker John Boehner to push through a reauthorization. The reformers have but two months to instead embarrass their colleagues into doing what Congress does best: nothing. Inside the House, Financial Services Chairman Jeb Hensarling and Ohio’s Jim Jordan are leading the charge, with recent assists from Oversight Chairman Jason Chaffetz and Michigan’s Bill Huizenga. The quartet jumped on the Justice Department’s April 13 charges against Johnny Gutierrez, a former Ex-Im loan officer accused of accepting bribes on 19 separate occasions to do bank favors. In a hearing two days later, the group outlined evidence that fraud and mismanagement is widespread. The bank’s acting inspector general, Michael McCarthy, testified that further indictments were possible in no fewer than 31 open fraud investigations.In a second joint Financial Services-Oversight hearing Thursday, the focus turned to the bank’s cronyism—particularly its failed green cronyism. Ex-Im guaranteed a $10.3 million loan to finance the overseas sale of products made by the infamous Solyndra. It gave $9.2 million to finance the export of solar panels from Abound Solar, which also went bankrupt. It seems no coincidence that both Solyndra and Abound were politically connected firms that also got huge loan guarantees from the Energy Department. Australia’s billionaire mining heiress Gina Rinehart snagged a $694 million Ex-Im loan for an iron ore project in Western Australia. Ex-Im has provided near record-breaking loans to subsidize a firm co-owned by Saudi Aramco—the world’s largest oil company. It provided millions to one-time Washington energy darling Enron. There is a reason for these deals, and for why more than 60% of Ex-Im’s money in 2013 benefited just 10 rich companies—it’s called politics. Outside Congress, the grass roots are rallying constituents. Some 50 conservative groups, organized by Americans for Prosperity, sent a letter to Congress last week demanding the bank die. Their leaders have been calling up pro-Ex-Im Republicans, re-educating them on bank myths, including the whoppers that it helps small businesses and doesn’t cost taxpayers a dime. And they’ve been pointing out the extraordinary political benefit of Republicans’ finally getting on the right side of capitalism, in contrast to such supposed populist crusaders as Elizabeth Warren, who supports the bank. Heritage Action’s growing list of influential members who oppose reauthorization is proof reformers are making progress. It now includes eight House committee chairman (the likes of Paul Ryan,Tom Price and Fred Upton), as well as Majority Leader Kevin McCarthy and Whip Steve Scalise. The Club for Growth is running ads in GOP districts noting that reauthorization is now opposed by pretty much the entire GOP presidential field: Jeb Bush,Scott Walker,Marco Rubio,Ted Cruz,Rand Paul.Yet the Chamber of Commerce and other Ex-Im supporters are lobbying hard, particularly Mr. Boehner—and with some apparent success. In a press conference Thursday the speaker said he’d support any plan Mr. Hensarling crafted to “reform” or “wind down” the bank; he worried that there are “thousands of jobs on the line.” But letting the charter expire by necessity involves an orderly wind down, since it would take years for the bank to close out loans. (Which also means jobs don’t go poof.) The real question is whether Mr. Boehner will take the extraordinary step of undercutting his own committee chairman to put a reauthorization on the floor.Reformers also need to spread this campaign to the Senate. It’s no good if the House kills Ex-Im, only for crony GOP senators to attach reauthorization to a “must-pass” bill (highway funds?). Utah Sen. Mike Lee had Mr. Hensarling address 35 senators Wednesday at the Senate Republican Steering Committee. That’s a start.Not so long ago, Republican porksters had all manner of (bogus) arguments for why they could not, should not and would not ever relinquish earmarks. Yet they did, and the world not only didn’t end, it’s a better place. They might remember that, and just say goodbye to the Bank to Nowhere.

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.